Growing your business

The following is adapted from the Small Business Administration (SBA). Please visit their website for the entire text. http://www.sba.gov

The objectives of this course are to:

• Understand the importance of planning for the growth of your business; and
• Identify areas to consider in developing your business.

Marketing Strategies
Creative and dynamic marketing strategies are essential for the success and survival of a small business. These strategies are based upon the answer to the question, "What is the market?"

True or false: The average consumer today is white, male, over 40 years of age, and married with 2.5 children.

Fact: According to U.S. Census Bureau figures, between 1980 and 1990, the overall population of the U.S. increased 9.8%. Broken down by race, the increases were: white 6%; African-American 13.2%; Native American, Eskimo, and Aleuts 37.9%; Asian or Pacific Islanders 107.8%; Hispanics 53%.

As diversity intensifies, your marketing efforts will need to address each of these segments and cultural differences within these segments. For example, Hispanics include Mexicans, Puerto Ricans, Cubans, Dominicans, and a host of South and Central Americans.

To effectively reach each of these distinct units, your marketers must understand individual lifestyles and backgrounds.

When you take into account gender diversity, you find that women buy more than just clothing, household products, and food.

Today, women buy cars, securities, business and industrial products, and many other items traditionally marketed to the male population.

Every segment of the market has the potential to increase your customer base. No segment should be excluded when developing your marketing strategies.

Your marketing strategies should change with the market because the face of the consumer is continually changing.

In this ever-changing market, the survival of a small business depends on creative and dynamic marketing strategies.

Management
The following checklist will help you determine the effectiveness of your firm's management structure. If you answer "yes" to most of the following questions, you are effectively managing your firm. A "no" answer indicates that you need to put more focus on the management issue.

• Are responsibilities clear and matched by authority?
• Is your business structure clear, yet flexible?
• Are communications focused on finding solutions rather than placing blame?
• Do people have the information and resources necessary to do an excellent job?
• Does staff come in early and stay late on their own initiative?
• Can people joke with and about each other and you?
• Do employees pitch in, unasked, during a crisis?
• Do customers and suppliers prefer to do business with you?

If you feel you need help in the area of management, contact our Office of Business Initiatives for material on this subject or contact our SCORE office for counseling at www.score.org.

The Service Corps of Retired Executives (SCORE) is a nonprofit organization which provides small business counseling and training under a grant from SBA. There are SCORE chapters in each state. (see: www.score.org)

 

Strategic Planning
There are eight steps in strategic planning that will help you chart a course for your business.

1. Develop a clear mission statement.
2. Assess the firm's strengths and weaknesses.
3. Conduct a thorough market segment analysis.
4. Analyze competitors.
5. Create company goals and objectives.
6. Formulate strategic options and select the appropriate strategies.
7. Translate strategic plans into action plans.
8. Establish accurate controls.

Most small business owners agree with the importance of a strategic plan, but a surprisingly large number of them have no such plan. The planning process increases a small firm's effectiveness and teaches the small business owner a degree of discipline that is important to business survival.

You can get detailed information on strategic planning for a growing business from the SBA's Office of Business Initiatives (visit: http://www.sba.gov/bi/).

Financial Management
Need cash? Having problems getting a loan for your small business? The SBA's Loan Guarantee Program can help.

An SBA loan is a small business loan made by a local bank that is, in turn, guaranteed by the U.S. Small Business Administration. If the borrower defaults on the loan, the SBA will reimburse the bank for a percentage of the loan loss. The existence of the SBA's guarantee is an inducement for the bank to make loans on terms it would otherwise not make available.

The key to successfully obtaining an SBA loan is being prepared and finding the right lender. It is important to know your needs and to explain how you arrived at the amount you are requesting. A successful loan application package provides a financial history of the business including a narrative background on the company, a list of the principal owner(s), and what the future holds. It is important to include monthly cash flow projections with a listing of critical assumptions.

To be eligible for an SBA loan, a business must be small according to the SBA's size standards. Most small businesses are eligible. The borrower must also be able to repay the loan from the cash flow and profits of the business.

Local banks and other select commercial financial firms comprise the distribution system for SBA loans. Contact your local SBA District Office for a list of lending sources in your area. (http://www.sba.gov/services/).

 

Remember, to grow and develop a successful small business, certain skills and techniques are needed. Once you have completed your initial plan for the growth of your business, review it with an SBA representative or one of our resource partners.

Good luck!

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